Ten years late to the market, Hyundai is ready to make hybrids a critical part of its lineup. The popular Sonata Hybrid will be priced to sell.

Hyundai took the wraps off its first hybrid, the Sonata Hybrid, last week at the New York Auto Show. As we reported, the company is taking direct aim at competitors in the mid-size hybrid sedan market. The Sonata could match or beat the Ford Fusion Hybrid and the Toyota Camry Hybrid on fuel economy—and undercut them on price by a couple thousand dollars. Moreover, Hyundai believes they’ve produced the best riding hybrid so far. The Sonata Hybrid goes on sale in December.

To learn more, we spoke with Michael Deitz, the product manager for the Sonata line. We started by talking about the design of the hybrid Sonata, which is expected to match the Toyota Prius for aerodynamics, by using sculpted front and rear bumper fascias, an alloy wheel design that’s filled in, and full cover underbody.

Deitz: The Hyundai Sonata Hybrid will be highly differentiated from the conventional version. When a perspective buyer sees this car on the road, they’ll say that it looks like a Sonata, but there’s something different about it. They’ll immediate know it’s a hybrid.

The grille, which looks very different, is actually functional, because there are air dampers behind there so that when you’re at low speed, they’re open to provide more air flow. Then, as you increase your speed, they close (for better aerodynamics). We cut the side of the rear bumper. It’s almost like it’s been sliced. We’re projecting that we’re going to have a 0.25 drag coefficient. For a substantially larger vehicle [than the Toyota Prius], there’s a lot more car for this coefficient of drag.

Is it difficult to change the design, like for better aerodynamics, while maintaining your brand identity?

Right now, we have leadership in fuel economy and we want to maintain that leadership. As somebody that’s coming out with a hybrid after when the Japanese Big Three have, we want this car to be distinctive and to deliver on what consumers are looking for most. We designed our hybrid so you get the best fuel economy when you’re on the highway.

We’ve done our research. Most US drivers are operating in a highway mode, roughly about 57 percent of the time. That’s why we’ve geared our hybrid to highway fuel economy. On the Prius as well as the Camry, frequently one of the concerns or—I hate to say it—complaints on a hybrid that they don’t get the fuel economy they expected. So, they’re not happy. They get good fuel economy, but it’s not what they anticipated.

I’d rather take a conservative approach, and get better fuel economy in the real world than project something high, and they don’t get that.

What strategies did you use to get the better fuel economy?

We’re the first to employ a six-speed automatic transmission as opposed to a CVT (continuously variable transmission). It’s one of our internal developed transmissions with lower weight and fewer moving parts. Overall, it provides less maintenance and better weight.

Through the electronic control unit, we’re able to calibrate and do the torque lockup for highway driving rather than city driving. We’re projecting 37 in the city and 39 on the highway. We still need to be competitive in the city, but we want leadership on the highway.

The other advantage is that it’s more fun to drive. Most of the CVTs have a feeling of surging. We’ve heard from consumers that they don’t like the surge feeling. It feels unnatural to them. They’re more accustomed to cars having a natural shift pattern.

What do you mean by surging?

As you’re about to pass somebody or if you’re going up and down hills. From a traditional transmission feel, it almost feels like it’s slipping. You press the accelerator, and feel the engine rev, and then suddenly there’s surge. With our six-speed transmission, you step on it and the car moves forward much quicker and smoother.

What’s your pricing strategy?

We are a value brand. We want to maintain that value position in the market place. You have some of these (mid-size hybrids) coming in at $26,000 to $27,000. I would hope that we would be able to do better than that.

By a couple of thousand dollars?

Yes. But that’s as much as I can share right now.

Does that mean upselling Sonata buyers to a hybrid, or moving against competitors into the growing hybrid market?

It’s growing market, and it’s a market that some of our Hyundai buyers have asked us for. We have one of the highest loyalty rates out there in the market. Our buyers are looking for hybrids, and we currently don’t have it in the brand. Number one, this is about meeting buyer demand. And Sonata is our mainstream most popular model, so it makes sense that this would be the platform to come to market first.

As a leader in fuel economy, we will continue to expand our offerings with alternative powertrains. We need to have a hybrid. At some point, we’ll expand our offering of hybrids, but we’re not announcing that at the current time.

What about pricing compared to the other Sonatas?

It will be right within the Sonata price band. Our Sonata starts just under $20,000 and goes to $27,000. Fully packaged out, the hybrid may come in a little higher than the Limited model—still probably under $30,000. We’ll have either three or four packages on it, with the base level in the middle of the range.

You’ve invested to create your new proprietary parallel hybrid system. Why?

Hybrids are here to stay. It’s something that we’ll continue to expand. A hybrid powertrain is something that every auto manufacturer will need to meet rising fuel efficiency standards.

Americans don’t want to all ride around in compacts. Continued powertrain development is important. We weren’t first to market with a hybrid, but we’ll be different—hopefully meeting some of the needs that have been deficits for the competitors.

The Hyundai Sonata Hybrid is just a start. Coming into the North American market with such a popular model makes a key statement that we have hybrid technology and we’re confident enough to put it in our best selling model in America.